Mursi to meet judges over power grab

Tents in Tahrir square as protesters and activists continue
with their sit-in in Cairo. REUTERS/Asmaa Waguih

Egyptian President Mohamed Mursi will meet senior judges
on Monday to try to ease a crisis over his seizure of new
powers which has set off violent protests reminiscent of last
year's revolution which brought him to power.

Egypt's stock market plunged on Sunday in its first day open
since Mursi issued a decree late on Thursday temporarily
widening his powers and shielding his decisions from judicial
review, drawing accusations he was behaving like a new
dictator.

More than 500 people have been injured in clashes between
police and protesters worried Mursi's Muslim Brotherhood aims
to dominate the post-Hosni Mubarak era after winning Egypt's
first democratic parliamentary and presidential elections
this year.

The country's highest judicial authority hinted at compromise
to avert a further escalation, though Mursi's opponents want
nothing less than the complete cancellation of a decree they
see as a danger to democracy.

The Supreme Judicial Council said Mursi's decree should apply
only to "sovereign matters", suggesting it did not reject the
declaration outright, and called on judges and prosecutors,
some of whom began a strike on Sunday, to return to work.

Mursi will meet the council on Monday, state media said.

Mursi's office repeated assurances that the measures would be
temporary, and said he wanted dialogue with political groups
to find "common ground" over what should go in Egypt's
constitution, one of the issues at the heart of the crisis.

Hassan Nafaa, a professor of political science at Cairo
University, saw an effort by the presidency and judiciary to
resolve the crisis, but added their statements were "vague".
"The situation is heading towards more trouble," he said.

Sunday's stock market fall of nearly 10 percent - halted only
by automatic curbs - was the worst since the uprising that
toppled Mubarak in February, 2011.

Images of protesters clashing with riot police and tear gas
wafting through Cairo's Tahrir Square were an unsettling
reminder of that uprising. Activists were camped in the
square for a third day, blocking traffic with makeshift
barricades. Nearby, riot police and protesters clashed
intermittently.

Mursi's supporters and opponents plan big demonstrations on
Tuesday that could be a trigger for more street violence.

"We are back to square one, politically, socially," said
Mohamed Radwan of Pharos Securities, an Egyptian brokerage
firm.

Mursi's decree marks an effort to consolidate his influence
after he successfully sidelined Mubarak-era generals in
August. It reflects his suspicions of a judiciary little
reformed since the Mubarak era.

Issued just a day after Mursi received glowing tributes from
Washington for his work brokering a deal to end eight days of
violence between Israel and Hamas, the decree drew warnings
from the West to uphold democracy. Washington has leverage
because of billions of dollars it sends in annual military
aid.

"The United States should be saying this is unacceptable,"
former presidential nominee John McCain, leading Republican
on the Senate Armed Services Committee, said on Fox News.

"We thank Mr. Mursi for his efforts in brokering the
ceasefire with Hamas.... But this is not what the United
States of America's taxpayers expect. Our dollars will be
directly related to progress toward democracy."

The Mursi administration has defended his decree as an effort
to speed up reforms that will complete Egypt's democratic
transformation. Yet leftists, liberals, socialists and others
say it has exposed the autocratic impulses of a man once
jailed by Mubarak.

"There is no room for dialogue when a dictator imposes the
most oppressive, abhorrent measures and then says 'let us
split the difference'," prominent opposition leader Mohamed
ElBaradei said on Saturday.

WARNINGS FROM WEST

Investors had grown more confident in recent months that a
legitimately elected government would help Egypt put its
economic and political problems behind it. The stock market's
main index had risen 35 percent since Mursi's victory. It
closed on Sunday at its lowest level since July 31.

Political turmoil also raised the cost of government
borrowing at a treasury bill auction on Sunday.

"Investors know that Mursi's decisions will not be accepted
and that there will be clashes on the street," said Osama
Mourad of Arab Financial Brokerage.

Just last week, investor confidence was helped by a
preliminary agreement with the International Monetary Fund
over a $4.8 billion loan needed to shore up state finances.

Mursi's decree removes judicial review of decisions he takes
until a new parliament is elected, expected early next year.

It also shields the Islamist-dominated assembly writing
Egypt's new constitution from a raft of legal challenges that
have threatened it with dissolution, and offers the same
protection to the Islamist-controlled upper house of
parliament.

"I am really afraid that the two camps are paving the way for
violence," said Nafaa. "Mursi has misjudged this, very much
so. But forcing him again to relinquish what he has done will
appear a defeat."

Many of Mursi's political opponents share the view that
Egypt's judiciary needs reform, though they disagree with his
methods. Mursi's new powers allowed him to sack the
prosecutor general, a holdover from the Mubarak era who is
unpopular among reformists of all stripes.